How Iran got economically socialist, and then Islamic socialist

“Ramin Mazaheri, a foreign correspondent for Iran’s Press TV, posted a blog accusing the World Socialist Web Site of betraying its ‘socialist principles’ and aiding imperialism, because we welcomed the working-class opposition to Iran’s capitalist government…”

I don’t mind when people don’t understand the nature of the Iranian republic and its modern democratic structure, as these are always complicated, but Iran is SO SOCIALIST economically that I am appalled there is such ignorance about it.

Of course, many leftists don’t understand economics at all.

Certainly, fake-leftists have absolutely no idea, as they are too timid to openly call for economic redistribution (and they appear to often fear the certainty of math, in general).

Regardless, economic issues are the single most important issue for anyone to understand about Iran because the West’s siege against Iran has been economic since the end of the Iran-Iraq War in 1988.

There are six fatal flaws when it comes to Western leftists’ understanding of Iranian economics:

– They view Iran’s economy in Western terms, which is impossible due to Iran’s totally unique (revolutionary) economic structure. Iran was even structurally unusual pre-1979, which few appreciate as well. This article will explain these historical and current facts.

– Apart from their clear lack of data on the Iranian economy in general, they also have essentially no data on any of the leftist aspects, because these are never relayed by Western capitalist media (of course). These facts will be relayed in this and the following article.

– They don’t understand that the Principlist camp (conserving the principles of the Revolution, often called “conservatives”) they love to openly detest are also strongly associated in Iran with promoting classically leftist economic ideas centered around redistribution. This is the inverse of the West’s conservative parties. On the other side of the aisle, the current Reformist (moderate reforms of the Revolution) government is pursuing economic rapprochement with Europe; for this they are absurdly and inaccurately being called “neoliberal capitalist” when many of them are certainly more committed to economic justice than most Western leftists. Indeed, when it comes to economics both Iranian mainstream parties are leftists on the global political spectrum because the 1979 Islamic Revolution was decidedly anti-capitalist.

They are confounded in their understanding of an economy where moral concerns actually play a key role, as this defies secular Western logic and experience. I do not naively say that morality alone guides Iranian economic policy, but it is undeniable that moral & religious concerns are often the only explanation for many aspects of Iranian economic policy.

They continue to exaggerate the importance of the bazaar: this is as if Iran still has a pre-industrial economy, and as if the Iranian government doesn’t own, control and operate the vast majority of the economy in the 21st century. This emphasis on the bazaar’s economic dominance is outdated by many decades. The WSWS and others persist with this analysis, because they are so out of touch with the facts, structures & ideological motivations of modern Iran, I assume. Bazaari do not play the key economic role they used to because Iran does not live in the 19th century. Have you heard there was an oil price boom in the 1970s….?

Some Western leftists, in their dogmatic rigidity, cannot see that Iran – like China, Vietnam, Cuba, North Korea or any other socialist countries – practice “socialism at home, mercantilism abroad”. This is in order to survive and to care for their People. The only socialist group which decry this would be the “socialist universe NOW” Trotskyists (like at the WSWS), who have made the fewest gains of any socialist doctrine. Many Western leftists thus refuse to even investigate possible examples of socialism in the Iranian economy, and thus they do not understand it properly today.

Add these six fatal flaws together and it explains why you get almost total nonsense when it comes to Westerners and their uniformed economic pronouncements about the nature of the Iranian economy.

Some of these flaws cannot be remedied due to wilful blindness. However, there are at least four mistakes which can be – and must be – remedied with simple data, and will be over this two-part sub-series on Iran’s economy:

They do not appreciate that an anti-capitalist stance reigned in 20th century Iran even during the time of the shahs.

They do not realize the enormous extent to which the Iranian economy is state-owned and state-directed, which is the economic component of socialism.

They do not realise how very little privatisation – sale of government properties to private individuals, whether domestic or foreign – has actually taken place, despite the constant talk of it.

They have no idea about the bonyads (state charity co-operatives), or other poorly-named “Third Sector” entities for which there is no Western equivalent, and which play a major part in the economy.

All of this ignorance means that Westerners cannot appreciate the situation of Iranian economy in 2018, thus cannot realize Iran’s tactical capitalist overtures to Europe, and thus do not support Iran in violation of their own humanity and their own ideals.

We must remember that capitalism tolerates no competition – “there is no communism in China” is but one example. But many on the left, especially Trotskyists, tolerate no competition or individualism either – “Islamic socialism is a sham“, to quote the WSWS, is another. “The Western model is the most advanced,” is another. Therefore, Westerners have never had any real interest in unearthing the actual policies and structures which compose what can only be called “Iranian Islamic Socialism” because they competitively feel it will only undermine them. They are trying to “win”, not “succeed” or “flourish”.

Many wonder what’s the point of trying to sway the dogmatically rigid? The truth, which is rarely reported by any of the aforementioned groups, is that economic war has, like for Cuba and North Korea, caused horrific pain, suffering and death to innocent Iranians. Therefore, this two-part sub-series – which is part of an 11-part series on Iran – aims to clarify the obviously hugely socialist nature of Iran’s economic structure.

Hopefully this will engender more Western leftist support. I view Western rightists as essentially Christian Party Democrat racists, Islamophobes & globalist capitalists: if they admire Iran’s nationalism, they certainly work against it; if they want to do business with Iran, they have a funny way of holding up their end of a bargain (at least so far).

In the 21st century socialism is undoubtedly present in varying forms around the world in every country – I will show that Iran is as economically socialist as any of them. If one supports efforts to destabilise Iran, one is supporting the toppling of a socialist-inspired economy and socialist-inspired government.

The 20th century shahs: Terrible, but at least they weren’t neoliberal globalists

Iran is very much like Thailand and Ethiopia in that they have a fair claim to have never been colonized. Iran has almost always been run by Iranians.

(Egyptians, however, were ruled by non-Egyptians from the end of the Pharaohs in 30 BC until Muhammad Ali in the 19th century (not the boxer). Ali was not actually Egyptian and the last several centuries of pharaohs were foreign puppets, but don’t tell any of this to Egyptians.)

What we can say with certainty is that colonialism was never strongly present in Iran, and certainly did not alter the existing class structure. Iran was never India.

“Colonialism” in Iran meant “zones of influence” by the Russians and English. Before they could even think of subjugating what is now modern Iran, they had to first hack off parts of Persia – which they did. However this was a very short era in Iranian history and certainly, if we are comparatively speaking, in humankind’s colonial era. The Anglo-Iranian Oil Company (now BP) lasted less than 50 years. In contrast, Algeria “was France” for 132 years – under complete subjugation: political, economic, religious, linguistic, cultural, etc.

Furthermore, the imperialist exportation of oil is far less societally-damaging than, say, the imperialist exportation of cotton – that requires deep, strangling tentacles into every area of agrarian and commercial society. Iranian culture escaped this devastating impact.

This lack of being colonised meant Iran never had many major structural obstacles to economic modernity which so many other countries still suffer from today. The fact that modern Iran’s societal structure does not suffer from colonialism’s legacy of poison is rarely appreciated, but certainly Iran is thankful for it.

Another key historical fact which is unappreciated is: modern Iran’s economy has always been state run.

Reza Shah (reign 1925-41) ended the Qajar dynasty and admired Ataturk’s statist mercantilism. Thus, he used the relatively new oil income to fuel local industry and manufacturing and – in a selfish manner befitting an Iranian shah – all of this planning, power and authority was all centred in the Shah’s person. The economy was not democratic, but it certainly was nationalist & centrally planned.

It also meant that there was no significant bourgeois class in terms of sheer numbers; the Iranian bourgeois was only the Shah’s coterie and chosen few, and not independent, world-trading merchants like in Western Europe. That is as important a historical fact as Iran’s lack of colonialism. Imagine your developing country with no bourgeois class to uproot, like China during their “(Drug) Treaty Century” / “Century of Humiliation” (1839-1949)?

Statist mercantilism meant the Iranian economy was totally protected, as it would be into the 1970s: there was no compact with Western imperialists for major foreign domination of local goods and manufactures – only for oil. Thus, there was no comprador class – you can say one technically existed to extract oil, but the oil was state-owned and not foreign-owned. Imagine your banana republic without a comprador class? Yet another huge historical advantage explaining Iran’s good future in achieving political advancement.

I hope the reader is appreciating in just how many profoundly different ways the Iranian economy developed, as compared with both Western nations and colonised nations.

2nd half of 20th century: Iran’s economic uniqueness grew & grew

Given that he was in total control of the economy, Reza Shah was forced to redistribute some oil wealth to guide the economy in such a populous nation – of course, he did not redistribute much.

His successor, Mohammad Reza Shah (1941-1979), continued this state mercantilism – he used oil revenues to enrich his person, of course, but he was also forced to make enough investments to complete Iran’s change from an agrarian to semi-industrial nation. In short: he was making so much money from oil that only an idiot wouldn’t have made the basic investments he did – he couldn’t have spent it ALL on himself and his coterie (though he apparently did try).

During his era Iran advanced from the periphery to the semi-periphery of the global economy thanks to some proper investments in infrastructure and basic industries, such as steel: in the 1970s Iran went from producing no steel to the level of France and the UK by the 1980s. This era is known as the White Revolution (1963-1978), and was it instituted specifically to avoid an (Iranian Islamic) Socialist revolution.

However, despite this advancement to semi-industrialism there was STILL no major bourgeois class!

In 1973 just 45 families owned 85% of private industry in Iran. Yes, this is “capitalist” – very – but just as not all “capitalism” is “neoliberal”, not all “bourgeois” classes should be considered the same. The 54-year Pahlavi dynasty created only a tiny bourgeois – and not comprador – class.

As socialist demands for more land for peasants increased after World War II, what the Shah essentially did was reduce the landholdings of the biggest gentry and provided compensation by handing the new industries to a few of them – i.e, he bought off the ones he preferred and made them beholden to him, the central planner.

Furthermore, the genuine middle class was tiny as well: government workers were just 5% of the workforce in 1976.

A tiny bourgeois, a tiny middle class, a tiny industrialist class: indeed, it was this repeated increase in the concentration of his power which made the shah unpopular and ripe for toppling. It also made Iran different.

Also significantly different in Iran is that pre-1979 the military had no role in the country’s economy.

The shah always feared a military coup, so he purposely kept them poor and dependent, and constantly manipulated the top leadership to avoid the rise of any one general. Of course, this is why the armed forces could not – and often would not – aid him in 1979. This lack of military involvement in the economy is a unique development in 20th century history – in the US, for example, there is no doubt that their economy is guided by the Pentagon, which is the world’s largest employer.

(In this sense, the “privatisation” of state assets to the (state-linked) Revolutionary Guards (which is not the military) is a sort of rebalancing more in line with the global norm, and certainly in-line with the socialist idea that the state and its organs should hold all the major assets. However this concept requires much more explanation in the next article, What privatisation in Iran? or Definitely not THAT privatisation.

This unique, so-called “privatisation” is also present in the discussion of the Basij in parts 4-7, as they are another state-controlled organization which has benefited from “privatisation” of state assets.)

Iran’s economy was always state-run, but 1979 made it for the People’s benefit

I think you’ll agree we have a lot of 20th century economic uniqueness to recap:

No colonial structures, total state planning of the economy, protectionist policies to promote Iranian development, no colonialist class nor any compradors working with them, a tiny domestic bourgeois, a weak & unstable military, two monarchs who were wary of foreign capitalists, let’s not forget the Islamic importance of charity, let’s not forget that Islamic financial rules preclude the rapaciousness of Western financial rules: Iranian economic development has never been typical, and thus resists the usual cliches. Use them and reflect your ignorance, and render your ideas useless to Iranians.

Clearly, there were totally different social forces at play which produced very different groups from the types even Marx imagined. Iran was, and still is, unique – for better or for worse.

Iran thus developed more like South Korea, where the Park military dictatorship decided the economic plan and controlled a small bourgeoisie’s relationships with foreign capital with the same strictness as the English did for an 18th century colonial subject. The huge difference is that in Iran the state was the main driver of growth, and not private industry.

And this explains other huge differences: such as why South Korea is filled with US troops, whereas all the US bases dedicated to subjugating Iran are around & not inside Iran. South Korea’s commitment to capitalism also explains with US corporations are all over South Korea, whereas in Iran you buy “Niks” and not “Nikes”, and you shop at the bazaar and not Wal-Mart.

South Korea is a common comparison for Iran, but incorrect: the best comparison is China. I elaborate – and only partly, because there are just so many common experiences, beliefs & institutions – in the 4th part of this series: Structural similarities between Iran’s Basij and the Chinese Communist Party.

However, South Korea and then Iran are the two nations whose UN Human Development Index increased the most from 1990-2014 – absolutely no small feat for either one, and certainly lessons regarding protectionism against foreign capital abound. Ignore that statistic at your national peril.

(I have often cited this UN statistic regarding Iran to show what all Iranians know and what likely forms the basis of the Revolution’s solidity in 2018: since the war ended the government has massively succeeded in transforming Iranian society for the benefit of all.)

So by the end of the 1970s the state WAS the capitalist sector – they owned it all, and much of what they didn’t own outright they controlled informally. This also means that Iranians have always seen the state as the natural driver of a centrally-planned economy; or at least they certainly have been prepared for the socialist concept of central planning and central ownership as much as any other country.

The problem under the Shah was: it was not for the People’s benefit – not enough economic redistribution of wealth. The 1979 Islamic Revolution obviously changed that, and only a liar, racist or anti-religion fanatic would deny it.

Given all these facts, the economic heritage of the Islamic Republic of Iran is difficult to define, but we must agree that Iran under the 20th-century shahs was nothing like a “bourgeois capitalist state”, “colonialist state”, nor a “neoliberal capitalist state”. Hooray for us!!!!!!!!! But down with the shah!!!!!!!!

This section should make clear that Iran’s revolutionaries thus inherited an economy totally ripe for total nationalization, as well as an economic mindset which had known nothing other than nationalisation and central planning. This was a huge advantage which has produced the vast redistribution of wealth post 1979 in Iran. Whether this was luck, the good grace of geographic determinism, Iranian ingenuity or some other force is not important – who cares about credit? What’s important is to see things clearly in order to understand Iran from now on, because what I have mostly read in the West is a bunch of ill-informed nonsense.

The oil boom of the 1970s threw the Shah’s 1%-centered system into crystal-clear relief, and so it was scrapped in favor off Iranian Islamic Socialism.

And that is where things get even more economically different!

Is Iran the most state-run economy in the world today?

You will have to read the next part of this series to get the complete answer, but I can only think of one country who might have more state control….

The Shah and his coterie, which controlled 70% of the nation’s capital – came entirely under revolutionary national control. This percentage of state control would, amazingly, go significantly higher in the coming years.

I do not expect that non-Iranian & non-economic (& non-good) journalists know the basic outline of economic history in Iran, but it is amazing that they do not know that Iran’s current economy is not only centrally-planned but almost entirely centrally owned…because for nearly 100 years of modern history the vast majority of Iran’s economy been under national control! This is not a new event! Tap tap tap – hello? Is this thing on?

Anyway…moving on.

1979 certainly wiped out the undemocratic state planner (the shah), the bourgeois class (reading this from Beverly Hills) and put Islamic Socialist revolutionaries in charge: they were tasked with creating & implementing a completely new system unseen in history…and that they did.

It had to be a “new system unseen in history” because the Iranian revolution was not just intensely nationalist and Islamic: there was an uber-intense demand to decouple from the entire international political system. This necessarily meant decoupling from capitalism as much as possible.

Indeed, because there was this popular demand to decouple from capitalism Iran’s nationalism could never – and is never and should never – be called “fascism” or “reactionary”. Khomeini’s “Neither East nor West but the Islamic Republic”, is no mere slogan, but an ideology of both independence and revolution; most Western nationalists don’t want revolution but merely independence, and this makes them neo-fascists. Tap tap tap….ah fuggetaboutit.

That anti-capitalist goal was undoubtedly met and preserved: Today, Iran is incredibly un-globalized, and at the bottom of all such tables ranking international economic connectedness. You can buy a fine pair (for the price) of Niks, however.

All of Iran’s economic planning and development remained state-planned and state-owned, but here is the difference: pre-1979, there was no talk of redistribution, of economic justice, of social justice, or of anti-privileges; post-1979, this was the state philosophy.

There can be no false claims that Iran’s “Islamic economy” isn’t a welfare state deeply concerned with social justice; it sits fundamentally opposed to the neoliberal model. To implement this is why Iran’s economy remains so controlled by the state, both constitutionally, in practice & informally.

But Westerners don’t have the facts about Iran’s unique (revolutionary) economic structures. I concede that uniqueness does complicate easy understanding. They aren’t even told about Iran’s massive success in redistribution – who would explain Iran’s economy in 2018 in the West?

What this final section, and all of the next part, will show is how Iran took the existing state capitalist model and built upon it something totally new – Iranian Islamic Socialism.

Background for the bonyads, because there is no Western parallel

Forty years is long enough to have realised that Iran’s economy is structurally totally different.

There is massive, massive, MASSIVE misunderstanding about unique (revolutionary) economic structures & ideas which are inadequately described as the “Third Sector” (the first two sectors being “Public Sector” and “Private Sector”). Clearly, I am not discussing the “Second Economy / Black Market”, which is a different sector.

If this “Third Sector” phrase is unique to you, it is likely because this is a sector which does not have a Western parallel.

Frankly, a better name is the “1B Sector”, because it is entirely accurate to say that this is a part of the Public sector. I will use “1B Sector”, a new term, because it is accurate.

(Being Public Sector is like being pregnant – you can’t be “just a little of either”. Well, actually you can – 20% is considered a controlling stake in a company, and a state can certainly have less than that. However – and this is detailed in the next part – Iran never goes less than 51% state control in seemingly anything, and certainly not any industry of even moderate importance. BP tried that with us – Iranians were not converted. So…perhaps it’s: “Being Iranian Public Sector is like being pregnant…”, but I will stick with the phrase “1B Sector” in this series.)

No account of Iran’s economy can be complete without these so-called “para-statal” organisations which are…under the government’s control. I will explain one of them, the bonyads.

When the WSWS penned this extremely broad and unexplained generalisation – “huge sums paid over to the Shia religious establishment” – I assumed they were talking about the state religious charity cooperatives (bonyads), for which it is very difficult for Westerners to even conceive of.

To put it briefly: The bonyads became major economic factors when the Islamic Republic of Iran nationalised the assets of the Shah and his 1% and…gave them to charity.

Totally pure capitalism from those hypocritical Iranian Islamic Socialists, right? It’s amazing all the hardcore neoliberal capitalism charities get up to, we all know!

That is how around 10-20% of the Iranian economy came under the control of state religious charity cooperatives. However, the administrative apparatus of the bonyads can go back 1,200 years – these are embedded, grassroots organisations.

Let’s first quickly talk about the role of charity in an Islamic economy – it is much more than just some free soup. Many Iranian politicians even talk of Iran being an “alms-based economy” (which seems like a stretch to me…but I certainly get it).

Charity will always have a significant role because of zakat – the Islamic practice (one of the Five Pillars) of giving 2.5% of your profits to charity. In Iran, this is a voluntary decision, and the giving is to imam-sponsored instead of state-sponsored collectors (unlike some Muslim countries). $1 billion was given in Iran via zakat last year, but not all zakat is reported, so it is likely much more. There is also khum: Muslim businessmen (especially Shia) are expected to give 20% of their profits to their local mosques for charity. I have no figure on khum, but you get a good khum and you can build a new mosque or something overnight (this leads to perceptions of “Millionaire Mullahs”, which I will address later). This works just like for Jews in the West: religious people come knocking on the door of your (Jewish-owned) shop and ask you to give some of your profits to support the community – it’s certainly not capitalist. Nor is it what some readers are thinking – “religious extortion”: Extortion is for personal and criminal gain – not community gains; you have made your profit off the community, after all. An underlying rationale for both of these economic levers is the idea that religious people can provide welfare as well as the state – that has certainly been the case in Iranian history.

So the bonyads were already needed and useful in Iran – the Revolution made them here to stay.

An introduction to Iran’s ‘para-state’ sector: The key word there is ‘state’

The only question is how much money they have under their charge. The 1979 Islamic Revolution decided that too – rather a lot. They made sure that much of the economy would be run with a religious – not capitalist – goal. This is a hugely important – and socialist – fact of the Iranian economy.

However, it was not just handed over with no strings attached – this is not a Western capitalist bailout of bankers! Nor are the bonyads some sort of Clinton Foundation – which existed to funnel money to the Clintons to fund their lifestyle in return for political access and favourable political decisions – for Iranian mullahs.

The bonyads now employ millions of people. Perhaps because Westerners don’t like to see religious people in charge of anything, this is mistakenly called “corruption” instead of “avoiding unemployment and poverty”.

The bonyads are not just in consumer goods but have been awarded parts of more sensitive economic sectors; the same goes for the Basij, another co-operative foundation. However, it’s the Revolutionary Guards who have been handed partial control of the big portfolios, sectors and projects upon which the country’s well-being depends: oil, telecommunications, large-scale development and construction. This was obviously all by plan, and all of these groups, their political backers and their employees have discouraged private competition because their ideology is that the state should control it – they prefer the bonyads (and Basji and the Revolutionary Guards) to Western capitalism (ands thus Western capitalists).

The main complaint about the bonyads is that the factories and businesses they were awarded became more economically inefficient, but…the entire point of taking the money from the capitalists’ hands and giving a large part to charity is inherently against the cruel efficiency of market capitalism. Capitalists will thus always talk badly about the bonyads.

The bonyads report directly to the Supreme Leader – not only is he the religious leader of the nation, he is the ideological leader of the modern, social justice-obsessed principles of the Islamic Revolution. People have different opinions on the role of the Supreme Leader, but we should all agree that Khomeini and Khamenei are no hard-core capitalists!

This decision has both pros and cons:

They are not concerning about making money, but about providing social services. Khamenei is not the CEO of the bonyads, LOL. In effect, the bonyads give the “soul of the government” – the Supreme Leader – a direct and influential hand in the economy. One may be against this, but one may not call this “capitalist”.

They bonyads are not not under parliamentary supervision, causing a lack of transparency and accountability.

The bonyads pay no taxes. This reduces government revenue, technically, but in reality it is yet another redistribution measure as it is obviously an implicit government subsidy of economic development, employment and charity. Six of one, half a dozen of the other – economically.

The bonyads can also technically make investment and commercial plans apart from the government’s five-year economic plans, which create redundancies, competition and inefficiencies. However, considering that the Supreme Leader, and many other religious leaders are tied to the bonyads, and the government, and are also heavily-involved in long-term economic planning, it is not as if the bonyads operate like economic loose cannons totally divorced from the democratic planning centers, grosso modo. The head of the one of the largest bonyads, Ebrahaim Raisi, came second with 38% in the 2017 presidential election and is perhaps the leading candidate to follow Khamenei as Leader.

I’m sorry to bring up these realities, because if there’s one thing Westerners don’t tolerate about Iran it’s understanding its nuances.

But these are not really “nuances” at all – the bonyads are under government control…but not much parliamentary or executive control…but they are under total judicial and Supreme Leader-branch control. It’s simply a unique (revolutionary) system, but do NOT call the bonyads capitalist.

Do you really think the average CEO is more ethical than the average mullah?

You must have a lot of faith in capitalism…a funny kind of faith, to me.

Not only do Westerners accuse the bonyads of being capitalist, they say it much more harshly. They accuse: “These must be fronts for ‘millionaire mullahs’.” Of course Westerners are very cynical when it comes to religion or money, so when the two intersect….

Truly, this is only an issue for Iranians who are obsessed with being anti-government and want to believe the worst about it. Most mullahs in Iran are barely-middle class – it’s an inherently absurd argument. Do priests in your country really live lavishly?

At the highest levels of the religious establishment is there money? Sure, and with zakat and khum there always was and always will be, but in many ways mullahs today are poorer than ever: In pre-modern times being a mullah meant you had formal studies, which meant your family had the money to send you to school in the first place. Take Rafsanjani, the stereotypical “millionare mullah” – how many people know that he was already rich before becoming a revolutionary? He comes from pistachio money, which is very big money in Iran.

The idea of “Millionaire Mullahs” came from the uber-capitalist magazine Forbes in 2003, and by their longtime Russia editor, no less (Russia in the age of Yeltsin, when Forbes reporters were probably feted like kings as the average Russian suffered). Why on earth we (especially leftists) would accept Forbes’ account of the bonyads is totally beyond my comprehension. I can assure you that this section has given you more objective information about the bonyads than Forbes will ever write about Iran in sum and until the end of time. They hate bonyads, and any charity they do not get a lot of public credit (and tax credit) for.

Do the bonyads have a lot of money? Yes, but there is a difference between being stewards of money and being CEOs. They are expected – by the people, press & government – to actually do something with the money, factories, subsidies and workforces they are handed. A bonyad leader cannot be Gordon Gecko and liquidate parts of a bonyad for his personal profit. If a bonyad leader dies the bonyad is not transferred to his eldest son like in England, LOL. A bonyad leader cannot “go public” and sell shares…and sell them to foreigners, too, hahahahahah. LOL, I am really having fun thinking of ways the bonyads do not conform to capitalist rules!

A mullah driving a Maserati and living in a palace and throwing lavish parties and living like a rap music video – LOL, the press would die from happiness at such a story because it would be so big and sell so many papers!

The idea that Iranian bonyad leaders are all massively living corrupt, unequal, high-off-the-hog lifestyles – like EVERY Western business leader in a comparable situation, of course! – is an absurdity on religious principle, and on economic structural principle, and it also ignores Iran’s highly-critical press. Other than that…Forbes spelled some names right, at least.

Again, bonyad leaders are not Western CEOs and it is inaccurate to imagine them as such…not that anyone in the West has enough information about the bonyads to imagine them at all. They are not in it for unrestrained personal enrichment, nor shareholder enrichment, nor only profit.

Therefore: there can be no question from leftists that the bonyads are indeed superior in every way for society than the continued presence of the previous capitalist class.

Perfect? No. Ways to get them better? Yes.

Capitalist? Go away kid, ya bother me.

However, more explanation of the 1B Sector is needed – this section on the bonyads hopefully primes the pump for readers to realize just how unusual Iran’s economy is with these so-called “parastatal” organizations. I hope I have definitely shown that not only are the bonyads not capitalist, but they are also not “parastatal” – they are not separate from the the unique branches of Iran’s government.

For the past 100 years Iran’s economy has been hard to get a handle on, but the last 40 years have truly been unique. Hopefully this article shed some light on things, but much is left as Iran’s economy is truly revolutionary in conception and practice.

That’s why clarifying the much-discussed but rarely-implemented “privatisation” is the inspiration for the next part of this series – What privatisation in Iran? or Not THAT privatisation.

***********************************

This is the 2nd article in an 11-part series which explains the economics, history, religion and culture of Iran’s Revolutionary Shi’ism, which produced modern Iranian Islamic Socialism.

Here is the list of articles slated to be published, and I hope you will find them useful in your leftist struggle!

‘The Death of Yazdgerd’: The greatest political movie ever explains Iran’s revolution (available with English subtitles for free on Youtube here)

Iran détente after Trump’s JCPOA pull out? We can wait 2 more years, or 6, or…

Ramin Mazaheri is the chief correspondent in Paris for PressTV and has lived in France since 2009. He has been a daily newspaper reporter in the US, and has reported from Iran, Cuba, Egypt, Tunisia, South Korea and elsewhere. His work has appeared in various journals, magazines and websites, as well as on radio and television. He can be reached on Facebook.

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Most, if not all the Arab speaking people from Morocco to Syria don’t give a rat …. about ethnicity, they traditionally AND actually do not have that European disease we call racism or my skin color is lighter that yours kind of nonsense. Most of these people just want to live their lives without being poisoned with the European complex.

I don’t think anyone can find a single verified billionaire living in Iran.

It’s true that Iran is not great on transparency, but the system is clearly focused on reducing billionaires, not increasing them. Anyone close to a billionaire is obviously made by – and beholden to, and thus can be brought low – by the government.

What do the rich spend their money on? LOL, you’d have to ask them! But, truly, my impression is that in 2018 the rich invest in real estate, gold, jewelry and other stable stores of value instead of productive economic investments. A lot also just send it outside the country, which is even worse. Is this all due to rich people being selfish or the difficulty of entrepreneurship in socialist Iran – likely both.

Actually, it sounds like the economy of the Shah was the ideal capitalist system. Not in the minds of Adam Smith or theorists, but in the minds of the top-dawg capitalists. They definitely want a system where they own everything and control everything…they’d be very happy if you could only shop at Walmart, only buy a car from Walmart Motors, buy Walmart computers with Walmart chips, fly on Walmart airlines in the latest Walmart Aviation jumbo jet, etc, etc, etc. As long as they owned Walmart and all its subsidiaries.

That’s the end state of capitalism. When the last capitalist has put everyone else out of business and owns everything and everyone. Indistinguishable from a monarch controlling and owning everything.

As always, an excellent write up. As there is very little Iranian literature on Iranian socioeconomics in English, this is a very welcomed article. At the very least, it provides a refreshing point of view.

However this was a very short era in Iranian history and certainly, if we are comparatively speaking, in humankind’s colonial era.

Short, but deadly.

When Russia pulled out in 1917, Britain took over. The country was just entering a major famine. Rather than tie up shipping to bring in food, which was abundant nearby, Britain told its troops to source their food locally. The effect was catastrophic. Between 1917 and 1920, 8 – 10 million Iranians died.

The US Legation was appalled. They did all they could to stop it. Mohammad Gholi Majd compiled his pamphlet “The Great Famine and Genocide in Persia, 1917-1919” mainly from American archives. Even American Jews contributed huge sums (for Iranian Jews, natch).

As a result Iranians loved and trusted Uncle Sam. Mossadeq had no trouble foiling the British coup in 1953, but didn’t believe the Americans were capable of overthrowing him.

Many thanks for bringing this up. The Persian Famine is indeed totally ignored. I planned to do a full write-up for the centennial last year, but never got around to it. I will one of these days.

The famine explains why “Down with England” is always wedged between “Down with America” and “Down with Israel”. The British were really not in Iran that long but, as you said, it was quite a deadly relationship. The famine also explains why I’ve never heard “Down with Russia” added to that chant.

“I’d like to add the Great Persian Famine of 1917-19 orchestrated by the British, which killed a minimum of 20% of our population and possibly as high as 50%. Ten million people died, making Iran actually the greatest victim of World War One. I bet you’ve never heard that view, either…. I defy you to find any English-language literature on the Persian Famine, yet you’ll have no problem finding English-language scholarship on the Great Leap’s famine – new works are always being written, published, reviewed in their Mainstream Media, advertised, etc.

Returning to the global famines perpetuated by colonialists – who attempted no Great Leaps for the natives: Why is that we have no Western names or faces associated with these crimes, and yet Western schoolchildren are universally taught that Mao is a butcher?”

“They don’t understand that the Principlist camp (conserving the principles of the Revolution, often called “conservatives”) they love to openly detest are also strongly associated in Iran with promoting classically leftist economic ideas centered around redistribution.”

Ramin’s word “redistribution” reminds me of two conservative Catholic writers at the beginning of the 20th century: GK Chesterton and Hilaire Belloc — the ChesterBelloc double act (so conservative that 20th century modernist socialists like GB Shaw and my younger self regarded them as positively Mediaeval). But at the start of this post-modern 21st century I have begun to appreciate the ChesterBelloc’s respect for religion, for the common man — and for a form of socialism, based on Church doctrine, which they called Redistributionism. So, if Iran’s redistribution policy may be called Islamic Socialism, I suppose the ChesterBelloc’s redistributionist policy may be called Christian Socialism.

Frankly, I understand neither politics nor economics, nor have I any idea what Redistribution means but, being a fan both of Islamic socialist Ramin Mazaheri and the Christian socialist ChesterBelloc I was struck by their use of the same — rather uncommon — word to describe their socialist principle.

In Chesterton’s short History of England, he describes the transformation of Christian socialism into modern capitalism by the theft of Church Land and the herding of people out of Common Land. This theft was done by a handful of money-hungry bandits who in his day were called ‘aristocrats’ and who today are called ‘elites’ but whom Chesterton calls by their right name, Oligarchs. He writes:

“The oligarchs were the descendents of theft and usury, an aristocracy of upstarts who grabbed the Land and held it by force against the people of England…. During the great days of English conquest, despite all the talk of Liberty and Patriotism, the House of Parliament passed Law upon Law to transfer Common Land to the hands of powerful landowners. The [English House of] Commons was responsible for the theft of the Commons [Land held in common by the English people under Mediaeval Christian Law].

So if Ramin is talking about Islamic Socialism, Chesterton is talking about Christian Socialism, and both of these have a religious context in The Book.

I am not qualified to judge on this subject; merely struck by the similarities between Chesterton’s prophetic analysis of the disastrous course of modern money-minded, usury-indebted, Anglo-Zio-Capitalist, Mammon-worshiping, mal-distributionist England, on the one hand, and Ramin’s analysis of a religion-based Redistributionist Islamic Socialist Iran.

Correction: the word used by ChesterBelloc to describe their Christian Socialist sysmem is not Redistributionist but Distributionist. I admit to not understanding the difference, but am struck by the similarities above.

Ramin, thank you for taking the time to write about the Iranian economy and clarifying important points related to this subject. I have a couple of corrections and a point regarding your explanation.

First, your have an important typo about khoms (which literally means one fifth in Arabic) – the s is missing but it is a very important s and shouldn’t be missed; khom could be misunderstood as wine barrel and we definitely don’t want that sort of economy!

Second, khoms is different from other forms of charity: it does not go to local mosques but has a specific purpose and is haq_e imam (must go to an Imam or his rightful replacement at the time of gheybat or the marja’e taqlid). Only organizations and people who are approved by these groups could receive khoms. The money must be used in promoting Islam in any and all shapes and forms whether in education (e.g., hoze elmiyeh), economically (e.g., to non-muslim poor), culturally, socially, defense, etc. and could also go to the descendants of the Prophet Muhammad (seyyed). So, the one who pays khoms trusts the payees and how they might spend it. This means, for example, that I might pay my khoms to Ayatollah Khamenei with the hope that he would use, at least part of it, to help people in Yemen, Palestine, Syria, etc. to defend themselves and Islam. I might not pay my khoms to some Marja’e Taqlid who might be passive in this regard or might be not so active in fighting western cultural, military, economic, and all other forms of imperialism.

Third, regarding Bonyads, here, it seems you’ve put Bonyads, Astan Qods Razavi (and other holy shrines), and Vaqf all in one category. These are all distinctly different entities. People pay charities or moneys to each of these specifying exactly what the money must be used for (for poor, food, building schools, building mosques, etc.) and if not specified by the contributor, it must be spend according to a faqih.

I think one of the most important functions of Bonyads, Vaqf wealth, Holy Shrines wealth (beyond redistribution of wealth and economic support to the poor) that is often missed is the fact that they are all defined in Islamic and Shi’a terms in structure and function, fully funded and supported by volunteer believers, and the government (no matter who is in charge) cannot fully control them. Therefore, should a group of people come to power in government that would just love to make contracts with multinational corporations, ruthless investors, capitalist idealists, those of us who believe in adl (personal, social, and divine justice) have a very real, tangible, and strong economic and religious tool (bonyads) to counter them. Perhaps this is an important reason why the Imperialist Inc. fear the bonyads, vaqf, Astan Qods, etc. and try to slander and weaken them. Regarding WSWS position about all these issues, they only have a hammer at their disposal and everything looks like nail to them.

@m.t.
What a brilliant rejoinder Bro, with your short explanation you have buttress Ramin’s work on Islamic Republic of Iran underlying economic counter weight to any capitalism encroachment on the Republic’s soft underbelly.
The Mullahs have been heavily underestimated by the West due to their ignorance and blind hatred for anything religion, something most people on this forum have often misunderstood about the Saker. We can only achieve our own destruction if we continue to neglect our spiritual aspect all for the sake of material wellbeing, something the Mullahs understand perfectly and which continue to give Iran the determination needed to continue to resist the western onslaught. Good work brothers.

Excellent information on Khums (Khoms). Both Zakat and Khums are in the Holy Quran. Zakat is Haram on the Prophet, his cousin Ali, his daughter Fatima, his grandchildren Hassan and Hussein and their descendants.

The Khums is for the Prophet, his cousin Ali, his daughter Fatima, his grandchildren Hassan and Hussein and their descendants. Abu Bakr the first Caliph after the demise of the Prophet did away with Khums, thus to starve Ali, Fatima, Hassan, Hussein……..

So, the Khums is now only a Shia concept….

You are right that the Mullahs collecting both Zakat and Khums, mostly the Mullahs with title of Ayatollah. Presently, the biggest collector of both Zakat and Khums is Ayatollah Sistani in Iraq. The family of Sadr has many who are Ayatollah. Muqtada Sadr father and his father-in-law another Sadr, were both Ayatollah and they both feed masses during the Saddam era.

Muqtada al-Sadr is the fourth son of a famous Iraqi Shi’a cleric, the late Grand Ayatollah Mohammad Mohammad Sadeq al-Sadr. He is also the son-in-law of Grand Ayatollah Muhammad Baqir al-Sadr. Both were revered for their concern for the poor.

Thanks for the many good and necessary points. The bonyads – and I lumped them all together because it’s already an 11-part series and long enough, LOL – are, as you said, a way to promote anti-imperialist, pro-socialist, pro-Iranian and pro-religious ideals in a permanent way regardless of a change in government/political party leadership or counter-revolution. It is a unique revolutionary concept and one which the West and anti-Iranians are eager to disparage and hide from view.

The bonyads and the Basij, in my view – and I write this objectively – have rather clearly been designed to strengthen both the unique clerical branch of the government as well as the 1979 Revolution & its constitution; as you said, it is a very real tool which can be used as a weapon to fight anti-Islamic Republic of Iran forces, and I don’t think anyone could objectively disagree with this assessment.

I think the bonyads are very similar to any NGO – you can fault an NGO like the United Way for spending too much on bureaucracy (the United Way is rather a poster child for this) if you want, but that is really focusing on the negative. NGOs are not perfect, but they are not capitalist, try to do good work and are staffed by mainly good people (goodness does not necessarily mean capable, not-negligent or progressive). The bonyads have a further of advantage of being focused solely on Iran at a time of Cold War.

Indeed, my recount of the bonyads is far, far too incomplete for such a revolutionary concept. This is just journalism, after all! I’m trying to give mainly broad strokes of a country whose broad strokes are totally misunderstand or, like the bonyads, not even known. People are calling Iran “neoliberal”, after all…what neoliberal supports the bonyads, LOL?

Thank you, Ramin, for your thoughtful response. Yes, I fully understand the need for brevity in an 11-part series! Please continue the good and much needed work. Khoda Qovvat! (May God grant you strength).

I must, however, disagree with you on your point regarding NGOs. Bonyads, in the most fundamental way are very different from NGOs: in the US, NGOs have a 501(c)(3) status and compete with one another for funding. Outside of the US, they are almost entirely funded by either some US program (e.g., USAID and the like) or by corporations (Bill and Melinda Gates foundation, George Soros, etc.). The money is tainted from the get go and the agenda of NGOs are set by the funding entity for their specific purpose. A good book to read for details and examples of how NGOs are in fact the tool of imperial and corporate quests is The Revolution Will not be Funded. The book calls NGOs a 1.3 trillion dollar Non-profit Industrial Complex that serves as buffers between social movements and corporations designed to derail any real and genuine social movement and dissent.

I agree with you about many nice people who work with NGOs but that cannot hide the true nature of NGOs. Many “Asiyyeh-ha”, too, may be living in Pharaohs’ palaces but that cannot hide the true nature of theses palaces or Pharaohs.

Looking forward to the next ten parts. Thanks.
I was in Iran recently and eager to find out what people thought about the politcal and social scene. My wife said I should talk to our hotel maid, who was intent on leaving the country. She was an intelligent and sincere girl from an ordinary family, and was about to complete a masters degree in a serious subject. She said there was very little prospect of her getting a good job at home because she had no connections. This is perhaps a by-product of the face-to-face sort of ethical economic order you speak of. I wonder what can be done about it.

I read your articles with interest, especially about Iranian flavour of socialism. But it appears the GINI index of iran is about 0.37, which indicates that distribution of income is way too unequal. Most European countries have an index of less than .30 and even US is .41, not too far from Iran’s figures.

How can that be explained? A logical explanation would be that just like Pehlevi, the current elite keeps the fruits of the country to themselves, and that does not necessarily mean that the assets would have to be privatized to achieve that, as apparently is the case according to your articles.

I think comparing imperialist countries with Iran is not comparing apples and oranges. However, Iran should get a LOT of credit for pulling up to their level in just 40 years (and without imperialism).

GINI isn’t an end-all-be-all statistic: In 1976 the Iranian middle class was 5% of the population, now it is well-over 30%. There has clearly been massive redistribution in Iran, a country under both hot and cold war since 1980.

Could it be better, of course, like everbody. But modern Iran’s successful record deserves more notice, I think.

Ramin Mazaheri, the first and major problem with the Western lefties is that they cannot conceive of a theocratic socialist system. To them, socialism is atheistic and all clerics are extreme right-wing, full stop. Hence, you read absurdities like “Iran’s revolution was choked by the Mullahs, who killed Socialism in the country” (can’t remember where I read that, but that’s anyway when you stop reading).

What they cannot wrap their heads around is that we are talking about two different levels of discourse: religion will give the general, ethical, societal guidelines, whereas socialism will be the economic system. They tie in beautifully because in general, barring some exceptions like Protestantism (which is connected to capitalism, see Max Weber), religions are about protecting the underdog and so is socialism, so they are natural allies. But as the Western leftists cannot think out of their box, they are condemned to not understand AT ALL what is under their very own noses.

Great article, Ramin. Thanks. Sorry for this late response (had a computer crash).

Before I read this page, I wasn’t even aware of bonyads, though they are clearly an important factor in an important country. I have to thank the mainstream media for being so honestly informative (not).

Someone earlier mentioned that Iran’s Gini coefficient was allegedly 0.37 (compared to 0.41 for the US). My answer is that there are lots of ways to cook the numbers

As for Iran, its Gini coefficient could depend on how you count it. The bonyads, for example: who owns them? I think Ramin would say, “nobody”. But I have little doubt that those who think Iran’s Gini is 0.31 assign ownership to someone, probably the mullah in charge. Hence Iran’s Gini is deceptively inflated.

I think there was a time when the “socialist universe NOW” plan, attributed in this article to ‘Trotskyists’, was most appropriate. That time was following the Russian Revolution of 1917. The Russian Revolution was largely a repudiation of the First World War, in which as many as 19,174,335, including between 2,840,000 to 3,394,369 Russians died (https://en.wikipedia.org/wiki/World_War_I_casualties).

Had the Russian Revolution spread to Germany (as almost occurred several times between November 1918 and October 1923 ) and elsewhere, then Hitler would have become a small footnote in history and the Second World War, in which 60 million died, would have been prevented.

Whilst this paradigm may not be not wholly suitable to the world in 2018, do you think that secure and lasting world peace is possible whilst those responsible for the deaths of millions in Indochina and Korea and many hundreds of thousand of deaths in Iraq, Afghanistan, Libya, Yemen, Syria and elsewhere, still have their hands on the levers of power in the U.S. Britain, France, Israel, … ?

Apart from my above concern, I think the first half of the above article is excellent. I will read the rest first thing tomorrow.

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